| STOCKHOLDERS' EQUITY | NOTE
5 – STOCKHOLDERS’ EQUITY On
October 5, 2017, the Company entered into common stock exchange agreements with each of its three largest stockholders, to exchange,
in the aggregate, 137,324,000 shares of the Company’s common stock for 137,324 shares of Series A Convertible Preferred
Stock (the “Series A Preferred”). Each share of Series A Preferred is convertible into 1,000 shares of the Company’s
common stock, automatically upon the occurrence of all of certain triggering events, as set forth in the Certificate of Designation
for the Series A Preferred, namely (a) the sugarBEAT device to be commercialized has CE mark regulatory approval; (b) retail sales
having commenced; and (c) retail sales exceeding $5 million, inclusive of advanced sales or voluntarily by the holder after February
7, 2018, if these triggering events have not occurred. Each holder of issued and outstanding Series A Preferred is entitled
to a number of votes equal to the number of shares of common stock into which the Series A Preferred is convertible. Holders of
Series A Preferred are entitled to vote on any and all matters presented to stockholders of the Company, except as provided by
law. The Series A Preferred has no preference to the common stock as to dividends or distributions of assets upon liquidation
or winding up of the Company (which has been agreed to by the holders of the Series A Preferred). The Company determined
that the fair value of the shares of Series A Preferred issued for the shares of common stock was equivalent to the fair value
of the shares of common stock exchanged. On
November 6, 2017, the transactions contemplated by the exchange agreements were consummated and 137,324,000 shares of common stock
were cancelled. As a result, the Company had 67,676,000 shares of common stock issued and outstanding as of March 31, 2018. On
June 5, 2018, the three holders of the Company’s Series A Preferred each delivered notices of conversion to voluntarily
convert their Series A Preferred, in the aggregate amount of 137,324 of Series A Preferred shares, into 137,324,000 shares of
common stock. The holders had the right to voluntarily convert each share of Series A Preferred into 1,000 shares of common
stock of the Company. On
October 19, 2018, the Company entered into an Equity Distribution Agreement (“Distribution Agreement”) with Maxim
Group LLC, as sales agent (“Maxim”), pursuant to which the Company may offer and sell, from time to time, through
Maxim (the “Offering”), up to $20,000,000 in shares of its common stock (the “Shares”). Between October
19, 2018, and March 31, 2019, the Company issued 234,998 shares of its common stock through the Distribution Agreement and received
gross proceeds of $455,105. $161,102 of costs were incurred in relation to this transaction. In the three months ended June 30,
2019, an additional 143,388 shares were issued under the Distribution Agreement generating gross proceeds of $152,493 and costs
of $9,575. There was no further activity through this agreement during the quarter ended September 30, 2019. As of September 30,
2019, the Company may sell, from time to time, the remaining $19,392,402 in shares of common stock under the Distribution Agreement. On
December 18, 2018, the Company entered into a placement agency agreement with Dawson James Securities, Inc. with respect to the
issuance and sale of an aggregate of up to 2,400,000 units, each unit consisting of one share of common stock, par value $0.001
per share, together with one warrant to purchase one share of common stock at an exercise price equal to $1.04 per share, in a
public offering. The warrants offered in the public offering will terminate on the fifth anniversary of the date of issuance.
The public offering price for each unit was $1.04. The
closing of the offering occurred on December 20, 2018 and at such closing the Company sold 1,942,061 shares of common stock and
1,942,061 warrants for gross proceeds of $2,019,743. The net proceeds to the Company from the sale of the shares of common stock
and the warrants was $1,691,541, after deducting $328,302 of placement agent commissions and other offering expenses payable by
the Company. As of September 30, 2019, 86,357 of the warrants had been exercised, generating $89,811 of additional proceeds. There
was no activity during the quarter ended September 30, 2019. Effective
December 18, 2018, the Company issued a unit purchase option to the placement agent to purchase 97,103 shares and 97,103 warrants.
The Company has classified this option as equity. The unit purchase option has a term of three years and an exercise price of
$1.30. Earnings
(loss) per share The
following table sets forth the computation of basic and diluted earnings (loss) per share (“EPS”) for the periods
indicated.
Three
months ended September 30, Six
months ended September 30,
2019 2018 2019 2018
($) ($) ($) ($)
Net loss
attributable to common stockholders (1,117,040 ) (1,139,275 ) (2,368,305 ) (1,902,428 )
Weighted
average basic and diluted shares outstanding 208,021,967 205,003,261 207,929,675 155,957,363
Basic
and diluted earnings (loss) per share: (0.01 ) (0.01 ) (0.01 ) (0.01 )
The
Company excludes warrants outstanding, which are anti-dilutive given the Company is in a loss position, from the basic and diluted
earnings per share calculation. Basic
earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted-average number
of common shares outstanding during the period. For the three and six month periods ended September 30, 2019 and 2018, warrants
to purchase 10 million shares of common stock were anti-dilutive and were excluded from the calculation of diluted loss per share . |
